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sukhopar [10]
3 years ago
8

A bank quotes a stated annual interest rate of 4.00%. If that rate is equal to an effective annual rate of 4.08%, then the bank

is compounding interest:________.
A) daily

B) quarterly.
Business
1 answer:
Mrrafil [7]3 years ago
6 0

Answer: Quarterly

Explanation:

Annual interest rate = 4.00%

Effective annual rate = 4.08%

To know if the bank is compounding interest daily or quarterly goes thus:

Effective Annual rate can be calculated using:

= (1+Periodic rate)^number of compounding periods - 1

Therefore, we calculate the daily compounding effective annual rate which will be:

= (1+4%/365)^365 - 1

= (1 + 0.04365)^365 - 1

= 4.08%

For Quarterly EAR, this will be:

= (1+4%/4)^4 - 1

= (1 + 0.04/4)^4 - 1

= 4.06%

Therefore, the a bank is compounding interest Quarterly

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Explanation:

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business buying often involves long-term relationships with suppliers. How does this affect buying behavior​
Nadya [2.5K]

Answer:

By having a ling term relationship with the supplier has good and bad effects on buying behavior. I say this because it is a mass struggle for up in coming business entrepreneurs to be able to build long term supplier relationships which makes a lot of businesses end up failing. On the other hand for business that are already pretty established this is a benefit because they do not have to sorry about the suppliers side of bailing out and costing the business a lot of money.

Explanation:

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3 years ago
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Based on the corporate valuation model, the total corporate value of Chen Lin Inc. is $500 million. Its balance sheet shows $110
solmaris [256]

Answer:

The best estimate of its stock price per share is $11.20

Explanation:

To compute stock price per share, the equation is shown below:

= Total number of equity ÷ Outstanding number of shares

where,

Total number of equity = Total corporate value - Notes payable - long term debt - preferred stock

= $500 - $110 - $90 - $20

= $280 million

And , outstanding number of shares is 25 million shares

Now, apply the above equation

So, stock price per share = $280 million ÷ 25 million shares = $11.20

Other accounts like retained earnings, total common equity is irrelevant

Hence, the best estimate of its stock price per share is $11.20

6 0
3 years ago
Santa Claus is trying to forecast demand for coal this Christmas. For the past 300 years, the numberof naughty children (who wil
Darina [25.2K]

Answer:

The correct answer is B. Trend analysis.

Explanation:

The trend analysis is the method of analysis that consists in observing the behavior of the different items of the Balance Sheet and the Income Statement, to detect some significant changes that may have their origin in administrative errors.

This method allows us to know the direction and speed of the changes that have occurred in the financial situation of the company over time, so it is considered as a method of horizontal analysis.

It helps us to detect failures; but it is only an exploratory method, so it is always necessary to investigate further to find the causes of the failures. It is necessary to determine the changes suffered in the balances of the financial statement items that we are interested in analyzing. The trend analysis allows us to know the financial development of a company.

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3 years ago
Company A uses the FIFO method to account for inventory and Company B uses the LIFO method. The two companies are exactly alike
alexandr1967 [171]

Company A uses the FIFO method to account for inventory and Company B uses the LIFO method. The two companies are exactly alike except for the difference in inventory cost flow assumptions.  The debt-to-equity ratio measures your company's total debt relative to the amount originally invested by the owners and the earnings that have been retained over time.

The debt to equity ratio using the book value of equity in 2019 would be 2.29.

Finding the debt-to-equity ratio.

This can be found by the formula:

= Interest bearing Debt / Book value of equity

= (Notes payable + Current maturities of long term debt + Long term debt) / Book value of equity

= (10.5 + 39.9 + 239.7) / 126.6

= 2.29

Learn more about debt-to-equity  here

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#SPj4

7 0
1 year ago
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